Value Chain Marketing – Multidimensional Analysis Basics

[Editor’s note: This installment is part of an ongoing series. You can start at the beginningin order to follow its logical sequence.]

by Kenneth Rudich

Nearly everyone readily appreciates the distinction between a two-dimensional object and a three-dimensional object.

One is confined to showing only height and width, while the other adds the element of depth. In the latter case, the inclusion of depth makes an appreciable difference in the perceptual experience, especially if you get to rotate it like a virtual cube.

There are many instances in the world where the concept of dimensionality plays a pivotal role.

For instance, imagine standing at the edge of a two-dimensional swimming pool on a sweltering hot day.

Would you not likely then lament the absence of a third dimension?

Multiple Dimensions

A dimension is an aspect or feature of a situation, problem, or thing.

If you’re able to evaluate multiple dimensions of a situation, problem or thing — which is another way of saying, look at it from different angles, perspectives and views — there’s a good chance you’ll piece together a better understanding of what’s going on than might otherwise be possible if only one or two dimensions are available.

Google Cardboard

Doctors at Nicklaus Children’s Hospital in Miami experienced this firsthand when they enlisted Google Cardboard, a device that allows images to be seen in three-dimensional virtual reality, to map out a baby’s life-saving heart operation. They say they couldn’t have envisioned it otherwise.

According to CNN, the goggles made it possible to move around and see the heart from every angle — to almost be inside the heart checking out its structure. As the surgeon peered through the Google Cardboard he was able to mentally construct a procedure for fixing it.

This illustrates the potential benefit of multidimensional analysis.

Only thing is there’s a rub, because the requirements for undertaking such an analysis become increasingly formidable as the dimensions grow in number and size. The average person’s natural capacity for processing all the information can begin to waver under the additional load. In fact, it can be downright disconcerting.

For instance, can you immediately summon to mind a mental picture of something that is six dimensional, ten dimensional, twelve dimensional? Or are these too abstract for your mind’s eye to easily grasp?

One helpful solution for making this multidimensional challenge less abstract is to furnish a context that clearly reveals the relationship between the whole and its different dimensions or parts. Such an aid provides mental cues for establishing a sense of order and clarification.

In our earlier example, the notion of a swimming pool provided a context for situating the height, width and depth dimensions (After all, wasn’t the idea of a two-dimensional pool nonsensical?). If instead we had used a street sign for establishing context, most people probably would imagine it as a two-dimensional object.

Our value chain model, as unveiled thus far, starts us down the path of providing a big picture context for comprehending its multidimensional features.

Each major component represents one dimension. Specifically, the big picture is comprised of six generic dimensions, whereby each is but one piece of an integrated strategy for delivering value:

-Market Characteristics: This entails understanding the unique circumstances, needs, wants and motives that exist within both the actual and potential customer base, and then targeting the product/service benefits accordingly. A market analysis, in conjunction with ongoing feedback, can yield the vital information that is required to do this well.

-Distribution Channels: A distribution channel is a physical delivery path from the provider to the customer. There can be more than one distribution channel in play (indeed, modern circumstances make it virtually impossible to ignore the potential value of employing various delivery methods). Each dissimilar pathway from the provider to the consumer indicates the presence of a separate channel, and each will possess its own distinct set of resource demands and value fulfillment potential.

-Transactions/Operations: The activities that support the business aspects of the marketing function (they keep it running) – largely measured by cost, productivity and efficiency. It includes the core business competencies (e.g., accounting, finance, inventory management, etc.), the inputs, and the internal design an organization needs to carry out its marketing mission. Though automation technology has revolutionized much of this endeavor, an organization remains well-advised to never lose sight of the value a friendly face-to-face interaction can offer.

-Product/Service Attributes: The characteristics that are required to uniquely fill a want, need and/or motive. It also includes matters like supply chain implications, the integrity and quality of partnerships, the capacity to replicate successes or make timely modifications as needed, and a thorough knowledge about competitors.

-External Forces: The outside influences or contextual conditions that favorably or unfavorably impact a value chain. These can be a grab bag of circumstances — some may be leveraged to advantage, some must be complied with or dealt with upfront, others may need to be minimized or circumvented. It is important to identify the external forces that are germane to your product or service, and then attend to them as needed over time.

Also note: Though the external forces designation is a dimension in its own right, some of the forces within it also may be multidimensional in nature. For example, the external force of time can be divided into three dimensions: past, present and future.

Big Picture Framework

So now we have a big picture framework for conceptualizing the multidimensional context. We also know the underlying purpose of it, because value creation is a composite of mixing and matching interdependent dimensions.

The ideal scenario is to have them all converge together by way of a successful coordination/integration strategy.

Take, for example, the transactions component. What if customers are extended an optional payment plan rather than having to pay for something in full upon receipt? Will it make the product or service more affordable or appealing to some segment of potential customers?

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If so, then successfully promoting this value-added benefit depends on making sure there is a strong link between the communications component, the transactions component and the market characteristics component.

Getting these three to work in concert — communicating the right message to the right people, followed by seamless execution — is vital for optimizing the value of the optional payment plan.

Even with this big picture perspective the value chain approach is still somewhat abstract, however — just as the big picture perspective of height, width and depth for constructing a swimming pool is somewhat abstract. Which is to say, we’re aware of the goal to have these dimensions converge, but there’s a catch in making it so.

The catch lies in the application of them. Putting a dimension to work invariably triggers other considerations, like structural details and design implications, such as the need to break down the swimming pool dimensions into precise measurements that conform to the contours of the one under construction.

Similarly, the individual dimensions of the value chain are awash in structural implications and detailed design considerations. They can be comprised of rules, functional roles, influences, activities and processes.

The necessity to negotiate this circumstance sets the stage for moving deeper into exploring the concept of a multidimensional analysis.